Opinion
No. CV-04-4002106-S
June 28, 2005
MEMORANDUM OF DECISION
I. PROCEDURAL BACKGROUND
The above-entitled action was commenced on October 15, 2004. It involves the application of Vincent Messina (hereinafter referred to as Messina) and the United States of America Department of Housing and Urban Development (hereinafter referred to as HUD) for proceeds from a sale of real estate, known commonly as Mt. Olive Towers, by the Tax Collector of the City of Waterbury pursuant to Connecticut General Statutes Section 12-157(d). The applications are made pursuant to Section (i)(2) of the aforesaid statute. The City of Waterbury deposited one million one hundred and thirteen thousand three hundred and ninety-eight dollars and forty-nine cents ($1,113,398.49) with the Clerk of the Superior Court, which represents the proceeds remaining from the sale.
Vincent Messina is seeking to be paid the sum of fifty-five thousand three hundred forty dollars and sixteen cents ($55,340.16) for services which he performed for the City of Waterbury as the auctioneer for the sale of the property. HUD claims that it is entitled to all the proceeds being held by the Clerk of the Superior Court, and is objecting to Messina's application on the grounds, inter alia, that said fee is excessive.
A receiver appointed by the Court also made an application for a portion of the proceeds and, by the agreement of the parties, the receiver was paid the sum of sixty-three thousand six hundred and eight dollars and seventy-three cents ($63,608.73) in fees and costs. Said application is not the subject of this decision.
This matter was tried to the Court on June 8, 2005. The parties were to submit briefs on or before June 22, 2005.
II. FACTS
The City of Waterbury Tax Collector hired Messina to conduct tax sales pursuant to Connecticut General Statutes Section 12-157. The agreement was to the effect that the Tax Collector would give Messina a list of potential parcels for consideration for tax sales. Messina would review the list and do some preliminary work to determine whether the property was appropriate for a C.G.S. Section 12-157 sale. Messina and the Tax Collector agreed that Messina would do all the necessary work for any sale, including the preliminary work, conduct the auction, perform post-auction requirements and prepare and deliver the statutory deed to the tax collector. Messina would be compensated on a contingency basis wherein he would receive five percent (5%) of the amount realized above the amount of the opening bid. The opening bid was to be set at the amount of taxes owed the City plus costs associated with the sale. Messina was only to receive a fee if the property sold for more than the opening bid. Often, properties sold for only the opening bid. In those instances, Messina received nothing for his services.
Messina conducted numerous sales for the City of Waterbury, pursuant to the agreement. In those sales which exceeded the opening bid he was paid the five percent (5%) contingency pursuant to the terms of the agreement. In his contracts with other municipalities for which he conducted C.G.S. Section 12-157 sales, Messina received fifteen percent (15%) of the entire sale.
The sales price for the subject matter sale was one million seven hundred thousand ($1,700,000.00) dollars which resulted in an excess of one million one hundred six thousand eight hundred three and twenty-two cents, after taxes and expenses owed to the city. Messina was only to be paid as the auctioneer. He was not the officer who levied on the property. The officer who levied on the property, Mr. Sacco, was paid, pursuant to statute, out of the proceeds of the sale, and he makes no claim for the sums currently on deposit with the Clerk of the Superior Court.
III. LAW
Connecticut General Statutes Section 12-157(d) authorizes a municipal tax collector to "retain the services of auctioneers and other persons to assist the tax collector in the conduct of the sale and the cost of such persons paid for their services shall be added to the taxes due from the delinquent taxpayer." The Waterbury Tax Collector retained Mr. Messina pursuant to her statutory authority.
HUD maintains that the fee charged by Mr. Messina is unreasonable. In New Haven v. Bonner et al., 272 Conn. 489, 497 (2005), the Connecticut Supreme Court held that a fifteen percent (15%) collection fee for delinquent taxes was not unreasonable. The Bonner case involved an interpretation of Connecticut General Statutes Section 12-166, however, its analysis is instructive to the court in the present action. The Court further held that the lower court must honor a binding contract between the taxing authority and the collector. In the instant case, when considering Constable Sacco's fee of fifteen percent (15%) of the delinquent taxes and Mr. Messina's fee of five percent (5%) of the amount over the taxes and costs, the overall fee is less than eight percent (8%) of the sale price of $1,700,000.00 or a total or $132,611.51. The amount seems extremely reasonable to the court, especially in light of the fact that Mr. Messina performed services on numerous other properties for which he was not paid.
HUD maintains that Messina did not produce a written contract and that the Notice to Bidders did not satisfy the requirements of the Statute of Frauds. The Notice to Bidders did notify the bidders of a five percent (5%) auctioneer's fee. Mr. Messina was also provided with a series of lists of properties prepared by the tax collector in order to determine if Connecticut General Statutes Section 12-157 tax sales were warranted.
In order to form a valid and binding contract in Connecticut "there must be a mutual understanding of the terms that are definite and certain between the parties . . . To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties." LR Realty v. Connecticut National Bank, 53 Conn.App. 524, 534 cert. Denied, 250 Conn. 901, (1999).
Connecticut General Statutes Section 52-550 provides for a number of legal situations wherein a writing is required. The contract between Messina and the tax collector did not come within the ambit of the Statute of Frauds. Their contract was not for the sale or lease of real property. It was a contract in which Messina was to provide services as an auctioneer. Assuming, arguendo, that Messina's contract did fall within the Statute of Frauds, it would still be enforceable under the doctrine of part performance, as elucidated in the recent case of Glazer v. Dress Barn, 274 Conn. 33, 62 (2005). Mr. Messina had been paid his fee, pursuant to his agreement with the city, in sales, both prior to, and subsequent to the sale in the present case.
HUD also claims that Messina failed to meet the terms of the City of Waterbury's procurement Ordinance. However, the contract did not fall within the ordinance because it was a contingency contract and not a contract for an established amount. Further, the funds for payment were not from the city budget, but from the proceeds of the sale, and the tax collector had statutory authority to hire Mr. Messina. Connecticut General Statutes Sections 12-140 and 12-157 provide that all fees, including those of an auctioneer, are to be paid from the proceeds of the tax sale.
It is noteworthy that Messina has conducted tax sales in other municipalities. His contracts in the other municipalities provide for a contingency fee of fifteen percent (15%) of the entire sale.
IV. CONCLUSION
For the foregoing reasons, the Court finds that Mr. Messina's fee is reasonable. Therefore, the Court orders the Clerk of the Superior Court to pay Mr. Messina the sum of Fifty-Five Thousand, Three Hundred Forty Dollars and Sixteen cents ($55,340.16) for the services he rendered pursuant to his valid and binding contract with the Tax Collector. Said funds are to be paid by the clerk from the funds he is currently holding relating to the Mt. Olive Towers property. After the payment to Mr. Messina, the clerk is instructed to pay HUD the remaining sum of money in the account, and close the account on the Mt. Olive property.
THE COURT
Dennis Eveleigh, Judge.